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Thursday, January 28, 2010

Whenever a Big Pharma talks about RNAi Therapeutics, the investor world listens. Sometimes, however, it is important to put such comments into context, especially now that Merck may very well see its $1.1B investment, essentially into Sirna Therapeutics’ supposedly fundamental Tuschl I patents, evaporate. The $45M+$12M it had to pay in a settlement with Protiva (now Tekmira) for allegedly misappropriating SNALP-related trade secrets would almost seem to pale by comparison. So here a few annotations to an interview that Merck strategically put out recentlyin the Xconomy and that has raised some eye-brows in the field by providing some rare insights into their hitherto largely top-secret RNAi Therapeutics operations and by revealing some unorthodox drug development philosophies.

“Somewhere around the middle of 2006, we realized that Alnylam did a big deal with Roche, and we realized the area was heating up. We needed to do more than a collaboration per se. It ultimately led to the decision to acquire Sirna Therapeutics, which closed at the end of 2006.”

Merck clearly bought Sirna Therapeutics largely for what Sirna’s management told them to be gate-keeping IP: Tuschl I. This is also illustrated by the fascinating revelation by Dr. Alan Sachs, responsible for RNA Therapeutics at Merck and watched over by a Merck spokesperson during his interview, about Merck’s rush to buy Sirna Therapeutics in 2006. According to the interview, Merck seemed to have heard somehow through the grapevine in 2006 already that a large Roche-Alnylam deal was in the works. Fearful of being shut out from the fundamental RNAi Therapeutics IP, it scrambled to secure freedom-to-operate by purchasing Sirna Therapeutics which had always touted Tuschl I to cover human therapeutics. What follows is history...Merck buys Sirna, the Alnylam-Roche is announced the next summer, and what had to happen happened: Alnylam terminates their collaboration with Merck as it simply became untenable to have a relationship based on the very IP Merck was ardently fighting.Unfortunately for Merck, around the same time Tuschl I started to encounter serious problems in both Europe and the US (see Tuschl Tussle blog).

In this context it is easy to see why Merck is now emphasizing the value of RNAi as a target validation tool instead of a direct therapeutic, and justifies the $1.15B price-tag for Sirna Therapeutics on that basis. While I agree that RNAi should already have a beneficial financial impact throughout the drug development industry by reducing the target risk for other classes of therapeutics, what those responsible for the Sirna purchase should know best, but probably would not want to tell their superiors or shareholders, is that you do not have to pay $1.15B upfront to use RNAi for such purposes. For example, BMS and J&J have been getting the same benefit by working with Tekmira for a fraction of that cost.

And then, yes, we almost forgot that delivery was a challenge. However, taking a step back I find it remarkable that the systemic delivery of siRNAs has progressed from just about being able to knock down genes in mice, to the well established ability to knock down genes in primates and with first evidence for efficacy having been observed in humans. Not insignificant scientific progress for a period of 4 years, and maybe for fairness sake something that Dr. Alan Sachs ought to have mentioned. On the other hand, saying that others have achieved much more with much less does not reflect very well on yourself or organization. And while lipid-based delivery may be the only delivery technology that is ripe for the clinic at this moment, let's not forget that even a single such technology can unlock tremendous value by immediately being applicable to a whole range of diseases.

"AS: It’s a combination of the competition, and from our seat, a misunderstanding of the intent of the collaboration. That is, the field is so ready to put money in, we don’t want a Merck collaboration to be read as a sign of approval...”

To underscore his ‘concern’ that others should not make the mistake of overpaying for delivery technology, Dr. Sachs characterizes most of what is being presented to Merck essentially as worthless, theoretical back-of-the-envelope stuff. I would not want to argue with him that this was not true to some extent, using such deer in the headlights that inevitably will crop up in hot areas such as RNAi Therapeutics as an argument for demanding lower prices for anything delivery does not do justice to the real gems that are out there. And honestly, who really believes Merck to be sincerely concerned about the fiscal responsibility of competitor companies? Thanks for the well-meaning advice.

And to those 1% of clueless small biotech companies that, against all odds, have been found worthy of Merck’s further attention: Don’t get too excited about it. Now, you will have to work with them long enough until they have had enough time to familiarize themselves with your technology to then be able to terminate the relationship. No wonder that a company like Roche has become a much more desirable and, importantly, also a significantly more successful partner when it comes to sourcing RNAi delivery.

"[Unlike] companies developing [RNA-based] ApoB or PCSK9 therapies, for familial hypercholesterolemics, we’d stop our studies at Phase I to show that LDL is lowered or HDL is raised and follow with a small molecule."

Unsurprisingly, Alnylam and Tekmira got special treatment. Only biotech companies, all of which by the way are destined to fail anyway since they can’t afford the 30-year timelines that it takes a Merck to bring innovation to patients, would go into the clinic with intravenous formulations aimed at lowering LDL-cholesterol in desperately underserved hypercholesterolemic patients. I mean, huh, where is the consumer convenience in that?Instead, what you should follow is Merck’s model that, if I interpret him correctly, aims at selling life-style pills to millions of people, including those that won’t benefit from it. So as long as it is convenient and we are able to show in a 20,000 patient trial some minimal, though statistically significant benefit, that's how we plan to contribute to healthcare.

"AS: There are three main areas of delivery. First are lipid-based delivery systems. At the time of our acquisition of Sirna, they had successfully shown lipid-based delivery to the liver. Initially, it was through a collaboration with what is now called [Vancouver, BC-based] Tekmira. That was really the leading standard for the area. Several [applications to begin clinical trials] have been filed with the FDA. We spent a lot of internal research money and time on novel lipids. The liability of that platform is absolutely its safety. As you know from writing about the area, the biodistribution of lipid is focused toward the liver. Which has some indications that are useful for IV therapy, but it’s restrictive with respect to cancers and diseases of other organs."

While Merck seems to respect Alnylam to some degree, for the simple reason that only entities with money deserve respect, little Tekmira must feel quite flattered that it inflated itself large enough to be mentioned a second time. According to Dr. Alan Sachs, SNALP delivery is simply toxic and hopeless. Well at least as a therapeutic, maybe not for 'biomarker-driven' studies. If he had read the scientific literature since 2006, the time Merck lost access to the cutting-edge of liposomal delivery, then maybe Tekmira has learned a thing or two about SNALP technology since. Maybe Dr. Sachs ought to state the real reason why Sirna/Merck has soured on liposomal delivery, at least in public: In 2006, Sirna Therapeutics settled with Protiva on allegations of having misappropriated trade secrets during their collaboration which cost Merck $45M upfront, and $12M in contingent payments [note: to be clear here, the events leading up to this settlement occurred before Merck acquired Sirna].

Surprisingly, and coming as a potential bombshell, the premature nature of even the leading systemic RNAi delivery technology has apparently not stopped Merck from using RNAi Therapeutics in Man and out of the public’s eye:

“Do you have a lead drug candidate that’s been identified and ready for the clinic, or anything demonstrating safety and efficacy in the clinic?

AS: Again, our Phase Ib, IIa clinical trials [of RNAi molecules] biomarker driven studies are for target validation and de-risking. We wouldn’t disclose those, because those are targets that are quickly followed by a small-molecule or biologic. Because the indication might not be consistent with an RNAi therapeutic delivered through intravenous means. No diabetic in the general population, if you’re a Type 2 diabetic on [multiple oral drugs], then IV therapy isn’t going to work.”

This also reminds me of some cryptic comments in another interview given almost 2 years ago by a Merck business development person, who has left the company since, to an Indian newspaper:

“On the research front, the company is working towards providing personalized medicine. It has screened over six lakh RNAi, out of which two to three are in clinical trials and 10-20 are candidates for in pre-clinical trials.”

Given that Merck had used SNALP delivery in the past and SNALP has clearly been Merck’s leading systemic RNAi delivery technology, and with the reference to IV administration and metabolic disease, former Protiva shareholders may want to take particular note here. This is because the $12M in contingent payments from the settlement are payable to former Protiva shareholders upon the filing of a SNALP-related IND ($6M) and the dosing of the first patient in such a phase II trial (another $6M). It is quite curious then that Merck would characterize these studies as ‘biomarker-driven’ and to state that they had no intention of ever further developing these ‘drug candidates’.

So when in the next months Merck will be asked by their shareholders whether it bothers them to have forked over $1.1B for what now more and more appears to be worthless Tuschl I IP, and may not even have been rightfully assigned access to it in the first place, the attempt at damage control might go like this: ‘Oh Tuschl I…? We almost forgot about that. And no, we don’t believe that our position has changed significantly since the Max Planck-Whitehead trial because a patent with an 2020 expiration date is of no therapeutic relevance anyway. And if RNAi Therapeutics will ever make it to market, our significant investments will ensure that Merck will be there leading the pack, but we won’t tell you why nor show you (or audiences at scientific conferences for that matter) any data to back it up. Just trust our track record of cunningly making just the right strategic decisions when it comes to RNAi Therapeutics’.

Saturday, January 23, 2010

This entry is the second of a 2-part series on the upcoming decision of who will control key intellectual property for therapeutic applications of RNAi. In the first part, I tried to provide an outline of the developments causing ownership of certain data in the Tuschl patent applications to become such an important issue. Here, I will try and delve more into the technical details of the scientific milestones that made RNAi a conceivable new class of human therapeutics, and based on that understanding make an educated guess about the outcome of the Tuschl Tussle and how this could shape the RNAi trigger IP marketplace in the future.

Back to Science.

Could RNAi be used as a therapeutic? That was the sort of topic of wild speculation in the lab where I worked as an undergrad in 2001 on a plant gene silencing project. Hey, Fire and Mello reported this cool stuff in worms 3 years ago and as we can see double-stranded RNAs can trigger the same process so beautifully also in plants thanks to some nice work by the Baulcombe group and another one in Australia. But humans? Well, unfortunately vertebrates seem to represent the exception when it comes to the existence of RNAi. That darn interferon response system...All this would change in a watershed moment when Tuschl and colleagues at the Max Planck reported in Nature the very existence of RNAi in human cells and taught a captivatingly simple technology to induce it there: siRNAs. The story therefore seemed quite simple until then. First it was Fire-Mello, then Tuschl's siRNAs.

Fire-Mello

Fire-Mello coins RNAi. The critical contribution by Fire and Mello in 1998 was their realization that it was in fact double-stranded RNA that was the effective inducer behind a variety of strange gene silencing phenomena in worm genetics and quite likely beyond (e.g. variegated Petunia flower color).While it was not necessarily obvious at the time that this would be applicable to humans as it was still very much doubted that RNAi existed in humans, the deeply influential nature of this eureka moment of the field of gene silencing and the non-exclusive licensing approach taken by the Carnegie Institution, the owner of Fire-Mello, established it as a widely respected patent. Add to this the endorsement by the scientific community as evidenced by the Nobel Prize in Physiology and Medicine this work entailed, there should be little doubt in the mind of patent examiners about the therapeutic relevance of that work. Prohhhhbably a fundamental patent.

Biochemical work in fly cell extracts by the inventors behind Tuschl I (Tuschl, Zamore, Bartel, Sharp) and involving the MIT, the Whitehead, UMass, and Max Planck on the same gene silencing phenomenon in flies aimed at the elucidation of the molecular fate of these long dsRNA RNAi triggers. Their main finding was that during RNAi, long dsRNA gave rise to 21-23 nucleotide small RNAs and that target RNA was cleaved at 21-23 nucleotide intervals also. This strongly indicated that it was the 21-23 nucleotide RNAs that were guiding the destruction of the target RNA.This, however, is different from demonstrating that the 21-23 nucleotide small RNAs are able to trigger RNAi themselves, something one would think would be important for claims to this effect to be considered enabled.To test this hypothesis, they therefore isolated and then reintroduced the 21-23 nucleotide mix of RNAs into fresh fly cell extract and asked whether those were able to induce RNAi gene silencing, too.

What may come as a surprise to a few: the silencing with these purified 21-23nt RNAs was actually quite mediocre, about 50% silencing compared to >>95% silencing with the long dsRNA (Figure 12 of US Tuschl I application). Similarly, when the dsRNA length dependency of RNAi was tested, the shorter the dsRNA, the worse the silencing. Together, these types of findings described in Tuschl I seriously calls into question claims that Tuschl I technically enabled human RNAi. Some may even cite such data as proof to the opposite, namely that this work made it even less likely that short RNAs would be useful RNAi triggers.

What is the explanation for this somewhat surprising finding?In retrospect, it is most likely the fact that when the 21-23nt small RNAs were introduced they were single-stranded and not double-stranded and demonstrates that at that time, the authors did not know about the requirement for double-strandedness also of the small RNA intermediates for triggering RNAi . Consequently, the patent contemplates both single-stranded and double-stranded RNAs as candidate RNAi triggers. Thus, while an important piece of the puzzle of RNAi molecular biology history with ~1600 citations to the underlying Year 2000 paper, it by no means was the catalyst leading to the adoption of RNAi in humans. I would not even be surprised if the authors did test the hypothesis of whether such isolated 21-23nt small RNAs were able to silence genes in humans cells (not very difficult to do) and came up short.It is also worth noting that their discovery of small RNAs during RNAi was not entirely new to gene silencing scientists then, a year after Hamilton and Baulcombe reported such an observation in Science, something that also has not escaped the patent examiner.

Tuschl II

Tuschl II coins ‘siRNA’. The critical insight that, first of all, proved the existence of RNAi in Man and even more importantly in terms of enablement, taught a straightforward method for triggering this process in humans, came from very elegant work led by Tom Tuschl at the Max Planck in Goettingen and forms the basis for Tuschl II.

The spark of ingenuity by the people at Max Planck, not involving those at the MIT, Whitehead, or UMass, was that the small RNAs had to be in double-stranded form to serve as useful triggers of RNAi. To prove this, they generated short dsRNAs, which they coined siRNAs, through chemical synthesis, also a first, and found them to be potent triggers of gene silencing not only in fly lysates, but subsequently also in human cells. The fact that the fly lysate work was reported separately by the Max Planck group and temporally between the Tuschl I 21-23 nucleotide RNA paper and the human RNAi findings, further illustrates the temporal, geographic, and intellectual separation of Tuschl's work in Massachussetts and then as a group leader in Germany.

Importantly, these siRNAs allowed for gene silencing that was specific and independent of the interferon response, again something speculated about, but not clearly proven in Tuschl I.The Tuschl siRNA-template is now used by thousands of laboratories around the world, with an amazing 6000 citations to the underlying paper further illustrating its importance.

In the Max Planck vs Whitehead case, the Whitehead argues that 3’ overhang siRNAs that are at the core of the Tuschl II patent application were already part of Tuschl I.On the surface this is true. This is because for some strange reason and that is the biggest mystery to me in all of this and that I hope the next months will shed some light on, the human siRNA data miraculously appear at the end of the Tuschl I application, as does the term ‘siRNA’ emerge without prior definition. If this data were to remain part of Tuschl I, there is the real possibility that Tuschl II could be declared invalid on a technical basis because of Tuschl I’s priority status (in a temporal sense) and double-patenting laws.Not good for Alnylam!

The two related questions of which the answer will rock the RNAi Therapeutics universe are therefore: a) Has the human siRNA data that in light of the weak activity of the ’21-23 nucleotide RNA’ in fly lysates and very uncertain translation of those results into humans now form the inventive basis for the broad human RNAi claims in Tuschl I, been rightfully included?b) In doing so, has the Whitehead, responsible for prosecuting Tuschl I also on behalf of Max Planck, fulfilled its fiduciary duty towards all its partners?

First of all, as I explained in my previous post, the data critical for the siRNA claims of Tuschl I had been generated by the inventors behind Tuschl II (most importantly, in addition to Tuschl, Elbashir and Lendeckel; both of them also at the Max Planck then), but who are not named as inventors on Tuschl I.On this technical ground already, Tuschl I in its present form is invalid.Beyond that, there appears to be early communication in which Max Planck confirmed with the Whitehead that the human siRNA data were the domain of Tuschl II.So even if Max Planck and the inventors of Tuschl I had been wrongly convinced by the Whitehead and their hired patent attorneys that this should not pose a problem for the approval of both patents, any patent attorney worth his salt should have known this to be a fundamental omission. It would therefore seem to be wise to remedy this deficiency either by including the inventors on the Tuschl I patent or by leaving out the data as stipulated by Max Planck, before the specter of 'malpractice' was raised. And obviously, Whitehead now is clearly not acting on Max Planck’s behalf and this should be sufficient cause to give back Max Planck de facto veto power in Tuschl I by confirming that the Whitehead does not have Max Planck's power of attorney any more.

Because some of these issues are civil ones that are not the domain of the USPTO, it is important to sort them out before it goes back to the patent office and can cause lasting damage to the patents.For the stated reasons, I am quite confident that Max Planck and Alnylam will prevail and regain control of the human RNAi data and some sort of declaratory judgement that the way that data had been used in Tuschl I cannot be construed to contest the validity of Tuschl II in the future.

Before I consider the ramnifications of the two main outcomes of the Tuschl Tussle for the RNAi Therapeutics RNAi trigger IP space, it should be noted that Tuschl II already disclosed the observation that blunt-ended siRNAs can silence, too, just not as efficiently as 3' overhung siRNAs on average. 3' overhangs were therefore taught to be a preferred characteristic of siRNAs when used for mammalian RNAi applications. Hence, with many more reports confirming that RNAi in fact is so robust that all sorts of exogenously introduced small dsRNAs can efficiently induce RNAi in humans, it will become more and more difficult to convince the patent offices of a proprietary nature of not only overhung siRNAs, but also those without overhangs. One exception may be Silence Therapeutics’ blunt ‘Atu-siRNAs’ which because it was a relatively early disclosure Silence/Atugen was able to convince the US and European patent offices of their arguably surprising stability, an important feature for most RNAi Therapeutics approaches.

The most likely outcome. This will confirm Alnylam to be the most desirable partner based on RNAi trigger IP alone and leave Merck and RXi Pharmaceuticals empty-handed.Clear freedom-to-operate and exclusivity for the most efficient RNAi trigger that is also highly competitive with regards to other challenges such as innate immune activation.However, since Tuschl II does not claim blunt siRNAs, something I believe should have been done at least initially and maybe wasn’t because of an integrated Tuschl I-II strategy that now clearly has fallen apart, there remains scope for plenty of blunt-ended workarounds in the important 19-24 base-pair range. These workarounds, however, are not very attractive for licensing purposes if they cannot be protected by patents.Again, the exception here is Silence Therapeutics which, assuming that Kreutzer-Limmer's staying power is questionable, would be a beneficiary of such an outcome since it would now free Atu-siRNAs from the Tuschl I threat. There are, however, some significant limitations with Atu-siRNAs, since the scope of the patents is quite narrow in terms of allowed siRNA patterns and chemical modifications.Thus, while Tuschl II will offer a platform that should be applicable to RNAi Therapeutics for many years to come, Atu-siRNAs may not be able to adapt to the evolution in cutting-edge siRNA modification technology and hence its value should decline over time relatively quickly.

The IP position of Dicerna is probably least affected by the Tuschl outcome among the synthetic siRNA Therapeutics companies. There may be some uncertainties with whether and how the Tuschl patents may be applicable to Dicer substrates, but unless there will be a messy outcome in which both Tuschl’s go up in fire (highly unlikely), neither outcome 1 or 2 should change this much.

Under outcome 1, the market would have to balance the luxuries that Tuschl II offers, namely patent protection and overhangs, with the lower price, but added liabilities of the Silence Therapeutics and Dicerna platforms or even non-patented siRNA workaround designs.Last but not least, due to its use of overhangs, mdRNA’s overhung ‘usiRNAs’ would be a loser under this scenario.

If Tuschl I were allowed in the US in the form now proposed by Whitehead, then Tuschl II may go up in flames with Tuschl I covering blunt and overhang siRNAs comprising RNA strands of 21-23 nucleotides. Under this, albeit very unlikely scenario, Alnylam would have to share gate-keeper privileges for the most direct route to RNAi Therapeutics with Merck and RXi.Further risking to put pressure on price would be RXi selling such rights for a pittance as well as uncertainty about UMass’s ability and willingness to further grant rights to Tuschl I.Not all would be lost for the rest of the field even under this scenario.Silence Therapeutics, for example, would still be able to operate in the 15-20 base-pair range, with maybe 19 and 20 base-pair offering quite good opportunities of discovering efficacious and non-immunostimulatory siRNAs with acceptable efficiency. Similarly, 19 to 20 base-pair siRNAs may also become the preferred space for other non-patented siRNA designs, though all of this is dependent on what happens to Kreutzer-Limmer. Again, Dicerna would be little affected by all of this, and mdRNA may be well advised to try its luck with ‘usiRNAs’ outside the 21-23 nucleotides range, although I still feel chances are slim that one or two supposedly ‘non-nucleotide’ nucleotides will allow them to call what look and behave like siRNAs by another name.

Where does Big Pharma stand in all of this? Those interested in taking broad platform licenses to RNAi trigger IP can probably be classified into into two categories: 1) those like Pfizer and GSK that have diligently done their homework and will already have made up their minds about what type of RNAi triggers are required, including whether they consider overhangs to be an essential feature or not. Such companies can simply await the outcome of the trial and then choose the most economical option everything else (e.g. access to delivery and other know-how) being equal; 2) those companies that have shied away from heavy investments thus far and would prefer to get started with a pure-play RNAi Therapeutics partner providing patent-protected siRNAs and other basic RNAi capabilities.These companies may be most swayed by the outcome of the Tuschl Tussle, since they may be more relaxed in terms of what they consider acceptable siRNA designs.

Tekmira is a pure-play RNAi Therapeutics company that should be uniquely affected by the outcome, because it does not tout having invented unique siRNA triggers, although it certainly could make up such claims to the same degree that others do in the space, and because of its complex relationship with Alnylam.For one, it may determine whether potential partners consider it to be necessary to access SNALP delivery via Alnylam or whether they can go directly to Tekmira and get the same for probably considerably less.Moreover, in the unlikely case of a Max Planck/Alnylam loss, it may become even more difficult to insist on controlling SNALP delivery for RNAi Therapeutics all the while it is obvious that Alnylam is intent on minimizing the importance of Tekmira for their delivery efforts (the whole issue of what is called a SNALP which clearly differs between Alnylam and Tekmira). If SNALP is old and first-generation where is the harm in letting Tekmira fully exploit this technology by partnering it out ex-ALNY instead of letting it wither on the vine? I guess something ought to be worked out here to the satisfaction of both companies.

After 8 years of spending enormous efforts on confusing the investor world with what is valuable RNAi trigger IP, it looks like everything will come down to basic science.The collective scientific community based on the number of citations a paper gets and how it has recognized critical inventions for example in the form of scientific awards, would have been a much more straight-forward, fairer, and infinitely cheaper way of determining ‘good’ RNAi IP.Who else was better suited to spot critical contributions in technically demanding areas such as RNAi than scientists themselves? One would hope that the judge will concur, also in the interest of what RNAi Therapeutics could do for society.

Disclaimer: The above are my own interpretations of the case, based on publicly available documents from the USPTO and court sites, interviews, and press releases.Accuracy cannot be guaranteed as I may have overlooked critical elements of the case, and am neither trained in intellectual property nor contract law. Information provided herein cannot be relied upon for making investment decisions. Investments in RNAi Therapeutics are very risky and not suited for most. Consult with your own professional advisor before doing so.

Tuesday, January 19, 2010

Investors have been rightfully wondering what it is exactly that has been stalling large RNAi Therapeutics platform deals? Is it because of the macroeconomic uncertainties, looming healthcare reform in the US, Big Pharma deals that first need to be digested, or is it simply that the air has come out of RNAi Therapeutics and Big Pharma/Biotech (BPP), after a first wave of enthusiasm, have become more cautious about their investments in the space?I agree that all of this may play a role for why for example Alnylam was unable to meet their 2009 guidance for at least two more significant deals.Nevertheless, investments in RNAi Therapeutics have always have to do with the long-term vision that while risky, RNAi could be a transformative technology for drug development and it would be even riskier not to participate in it. BPP does not want to repeat the mistake it has made 2-3 decades ago when it left recombinant proteins and monoclonal antibodies largely to what were then small biotech companies.

Enter the Tuschl patents that are at the center of a trial set for next month between the Max Planck (along with Alnylam) and the Whitehead Institute, and that could prove transformative for RNAi trigger IP and future deal flow.

To my mind, and more importantly that of the scientific community at large, it was the work by Thomas Tuschl, then working with co-discoverers Sayda Elbashir and Winfried Lendeckel at the Max Planck Institutes in Germany, that was critical for the adoption of RNAi for gene silencing in human cells.In this work (one of the most cited scientific articles of the last decade), he found that short synthetic 19-24bp dsRNA, preferably with 3’ overhangs, efficiently induced RNAi knockdown in mammalian cells.These oligonucleotides form the basis of the Tuschl II patent series, solely owned by Max Planck and exclusively licensed to Alnylam for therapeutic use, that the Whitehead and UMass now want to cannibalize for their own benefit and that I consider together with ‘Fire-Mello’ (almost anybody can get access to these) as the most fundamental RNAi trigger IP.

Of course, the discovery of siRNAs was not made out of thin air.Work in fly cell extracts on the processing of large silencing dsRNAs of the type described by Fire and Mello in worms, showed that small RNAs of 21-23 nucleotides were generated during RNAi and that these appeared to guide target mRNA destruction (Genes and Development and Cell).These at the time of the filing thought to be single-stranded RNAs form the basis for the Tuschl I patent series (co-inventors Thomas Tuschl, Phil Zamore, Davide Bartel and Phil Sharp; jointly owned by Max Planck, the Whitehead, UMass, and MIT).The double-stranded nature and 3’ overhang of these, however, was not immediately apparent, and was the ingenious insight by the inventors of Tuschl II.

Here is the original main claim from the US Tuschl I application:

“1. Isolated RNA of from about 21 to about 23 nucleotides that mediates RNA interference of an mRNA to which it corresponds.”

Clearly, and consistent with the literature, no evidence for a dsRNA trigger. And somewhere down the line, you can find a much narrower claim encompassing 21-23nucleotide RNAs isolated following a what essentially is a fly extract treatment step- certainly not very strong and RNAi Therapeutic-relevant claim language to say the least:

“9. A method of producing RNA of from about 21 to about 23 nucleotides in length comprising:

(b) maintaining the combination of a) under conditions in which the double-stranded RNA is processed to RNA of from about 21 to about 23 nucleotides in length.”

Billions of US dollars have changed hands based on the interpretation of the scope of the Tuschl patent series.Sirna Therapeutics, which along with Alnylam and RXi Pharmaceuticals has access to Tuschl I, long maintained that Tuschl I encompassed the use of RNAi in humans since human RNAi data was contained as one example in the Tuschl I patent application, rendering Tuschl II-type siRNAs implicit in the ’21 to about 23 nucleotides’ RNA.According to this interpretation, Tuschl I would have enormous scope and in fact supersede Tuschl II.Merck bought this argument along with Sirna Therapeutics in 2006 for $1.1B!

You would think that before spending that type of money, Merck did their homework on Sirna’s fundamental IP position.If they did, then they were probably not too concerned about the fact that the short synthetic siRNA interpretation of Tuschl I critically rests on an inventive example in the patent application provided by scientists that are not on the Tuschl I patent.Even a person untrained in IP as myself will know that including inventive work by people not named as inventors is enough to invalidate a patent. It is this that I also believe is the hard fact to what it may boild down to in the end in the middle of all the hearsay of the case. I expect that the inventors of Tuschl I themselves would strongly and unanimously support Max Planck.Remember they are scientists and have no reason to risk their reputations by reaping the financial gains from inventions made by fellow scientists.

The manner in which the human siRNA example appeared in the Tuschl I application is equally startling and had long puzzled me. Tuschl I essentially talks extensively about the fly extract experiments, and then suddenly at the very end the human RNAi data are presented. Note also that the fly work and the Tuschl siRNA work were published in two separate papers by distinct research groups, and that the RNAi field is very much aware of the inventive step by Tuschl and co-workers that paved the way for RNAi in humans.

It is therefore not surprising that as a result Tuschl I has run into a host of problems during its prosecution in both Europe and the US and (after Merck-Sirna and Alnylam-Roche) has gradually been whittled down to an extent that it could almost be considered irrelevant for RNAi Therapeutics. Illustrating this point is the fact that the main claim of Tuschl I as recently issued in Europe essentially corresponds to claim 9 cited above (‘small- RNA-derived-from-fly-extract claim’).No wonder that RXi Pharmaceuticals and Merck, both Tuschl I made no mention of it, while ironically Alnylam which does not have an exclusive Tuschl I license, chose to announce it. I found quite curious given that a broader Tuschl I interpretation, if granted, should have started celebrations in Worcester and San Francisco Mission Bay and freed largely them from the pressures imposed by Alnylam IP.However, not a word.

Meanwhile back in the US where Tuschl I had also fought a battle of retreat, the patent office has additionally raised concerns about the overlapping nature of Tuschl I and Tuschl II, essentially based on the inclusion of the human RNAi data in Tuschl I.Since Tuschl I predates Tuschl II, the decision to adopt such a broad claim language would render Tuschl II invalid, something that would also be a huge blow to Alnylam.

Instead of dropping the human RNAi data and make life much easier for everybody, the Whitehead, which is prosecuting Tuschl I on their own behalf and that of UMass, MIT, and (!) Max Planck, started to vigorously embraced the data and in fact make them the main data on which the ‘amended’ main claim rest now almost entirely (see below).This also revives hopes at RXi and Merck/Sirna that Tuschl I is actually worth something. In fact, if adopted in this way, it would be THE gate-keeping patent for human RNAi Therapeutics. Here are the proposed amendments (in bold) to the main claim of Tuschl I proposed by the Whitehead:

"1.-16. (Canceled)

17. (Currently amended) A method of mediating RNA interference of mRNA of a gene in a cell organism comprising:

introducing double-stranded RNA interference of mRNA of a gene in a cell or organism comprising:

(a)Introducing double-stranded RNA of from about 21 nucleotides to about 23 nucleotides in length, wherein the double-stranded RNAs is in the form of two separate strands which are not covalently linked and has sequence correspondence to the mRNA which targets the mRNA of the gene for degradation into the cell or organism; and wherein the double-stranded RNA mediates RNA interference by directing cleavage of the mRNA to which it corresponds, wherein cleavage is directed within the region of sequence correspondence with the double-stranded RNA;

(b)Maintaining the cell or organism produced in (a) under conditions under which degradation of the mRNA occurs, thereby mediating RNA interference of the mRNA of the gene in the cell or organism."

The trial next month essentially centers on whether Whitehead, which is prosecuting Tuschl I, has acted in good faith when it included the mammalian RNAi data in Tuschl I, which really belong to Tuschl II, and by doing so has violated its fiduciary duty viz a viz Max Planck and if Tuschl I was then issued in such a broad form would irreparably harm the interests of both Max Planck and Alnylam as it would essentially kill Tuschl II.The outcome should determine who will be in charge of prosecuting the Tuschl I series and whether the human RNAi data can be included or not.

In my next post, I will detail my predictions on the outcome of the trial and lay out how the new RNAi trigger IP landscape will look like after the dust has settled.This, of course, has profound implications on the business development dynamics of RNAi Therapeutics. It will be important.

Disclaimer: The above are my own interpretations of the case, based on publicly available documents from the USPTO and court sites, interviews, and press releases.Accuracy cannot be guaranteed as I may have overlooked critical elements of the case, and am neither trained in intellectual property nor contract law.

Wednesday, January 13, 2010

By applying new cationic lipids to the basic SNALP/LNP formulation developed by Protiva (now Tekmira), liposomal siRNA delivery has now reached IC50 potencies of around 10microgram/kg in mice and non-human primates, a roughly 100-fold improvement over the last 2 years alone.This has profound implications for the types of clinical uses of this leading RNAi systemic delivery approach, particularly by predicting a critical improvement in the therapeutic index and lowering cost of goods and length of administration.Tekmira’s SNALP-ApoB program, for the chronic condition of severe hypercholesterolemia, is a good example where these types of improvements could prove critical for clinical success.

Before I go into the nitty-gritty of what will also include the politics behind liposomal siRNA delivery, a topic that I am sure is of interest to many readers here, let me state unambiguously: these are the types of scientific discoveries that could make a big difference to the clinical trajectory of RNAi Therapeutics and are extremely positive.All this can easily be forgotten when going into scientific and commercial details.

While these developments have been anticipated by comments made in conference calls and presentations at academic conferences by Alnylam and its collaborators from the MIT, Tekmira, and the University of British Columbia, the first scientific paper on this has just been published in the Proceedings of the National Academy of Sciences (Love et al.: Lipid-like materials for low-dose, in vivo gene silencing).This paper is a continuation of the so-called ‘lipidoid’ theme first

In the 2008 Nature Biotech paper, a library of alkyl acrylates or acrylamides coupled to amines yielded ‘98N12-5’ as the lead lipid with an IC50 in mice of around 1mg/kg. In that paper, the authors noted that unlike the SNALP formulation by Alnylam-Protiva/Tekmira published in Nature in 2006, the 98N12 system required only 1/3 of the lipid content and that it could be used in vivo without the need for an

additional helper lipid typically employed in SNALP formulations.Certainly, the less lipids, including the number of lipids in the mix, the simpler and better. Moreover, extrusion technologies which are difficult to scale up for clinical utility were used in that study.As we will see, the formulation technology as well as the lipid mix can make a huge difference in what liposomes are actually generated and somewhat takes away from the allure/necessity of high-throughput approaches to lipid discovery such as practiced here.

The new paper, however, is not a direct continuation from the initial screen, but is based on an entirely new library of amino-alcohols generated by epoxide chemistry.The stated motivation for doing so was the comparatively cleaner nature of the chemistry, circumventing the need for laborious purifications for initial tissue culture screens.While the 2008 library consisted of around 1200 compounds, this one was an order of magnitude smaller.Like before, the positively charged lipids were first screened in tissue culture by simple direct complexation with the siRNAs, i.e. not as a liposomal formulation.12 of the most potent lipids from that screen were then carried forward into mouse studies.Although it soon became apparent that there is only little predictive value of a tissue culture screen for in vivo studies, there were 3 formulations that achieved almost complete Factor VII ablation at 3mg/kg in mice. A dose-response revealed that behind the complete knockout data at relatively high dosages were concealed vastly different IC50s of 0.01 (C12-200), 0.3, and 1mg/kg.It therefore appears that the researchers got a lucky break that they included C12-200 in the 12-compound in vivo screen, a level of experimentation that can arguably be considered to be the real bottleneck for liposomal delivery research.

Since Alnylam is increasingly talking about second-generation liposomal nanoparticles (LNPs), including with cationic lipids, and regularly refers to Tekmira’s SNALPs as first generation in this context [example from press release on PNAS paper.: “ALN-VSP and ALN-TTR both utilize a first generation lipid nanoparticle formulation known as stable nucleic acid-lipid particles (SNALP), developed in collaboration with Tekmira Pharmaceuticals Corp.”], as do the ‘lipidoid’ papers contrast their formulations with the SNALPs, it is worth going into the formulation details here again.

For the initial in vivo screen, again no helper lipid was noted (cationic lipid/'lipidoid' +cholesterol +PEG-lipid only). As to the formulation method, the following can be found in the methods section: “siRNA at a concentration of 10 mg∕mL in 50 mM sodium acetate was added to empty liposomes at a weight ratio of 10:1 total lipids:siRNA and the mixture was incubated at 37 °C for 30 min. Formulations were then dialyzed…” While no mention is made of extrusion, they reference the 2008 Nature biotech paper for further details on that formulation method. If not, I would almost have to come to the conclusion that this description would lead to Silence Therapeutics-type lipoplexes and not liposomally encapsulated siRNAs[update 15Jan10: I have looked up the incubation method, and it does appear to result in encapsulating liposomes with the right pHs and EtOH concentrations]. Be that as it may, the 3-lipid formulation and method differs from that used by Tekmira.In the case of C12-200 this yielded a 140nm particle for the initial in vivo screen that had the IC50 for the liver-expressed Factor VII of ~0.01mg/kg.

When it came to the monkey studies, however, the formulation and physical nature of the C12-200-containing particle was changed dramatically. The 2008 advantage of having only 3 lipids in the mix, was given up in favor of the addition of the now industry-standard helper lipid DSPC.Moreover, for the formulation method itself the rapid mixing-ethanol dilution method was employed with the T-shaped apparatus- both invented by Protiva/Tekmira. If anything, the what is referred to now as non-SNALP ‘lipidoid’ formulations are starting to look more and more like gold-standard SNALPs both chemically and formulation technique-wise. Also not insignificant is the fact that while the crude 3-lipid nanoparticles were 140nm in size, the SNALP formulation that was then used for the non-human primate studies was only 80nm in size (smaller is better here), a huge difference and complicating translational studies.Scale-up needs to be considered from the early stages.

Nevertheless, despite the big differences in the physical properties of the particles, the SNALP formulation containing the C12-200 cationic lipid silenced the monkey TTR gene by 70% at 0.03mg/kg following a single low-volume 15-minute infusion (note: Alnylam has filed for an TTR IND at the end of last year using 'first generation SNALP technology'). It thus appears that a potent C12-200 cytoplasm-accessing ability for hepatocytes can mask variable SNALP shapes.In an attempt to elucidate the mechanism of this, in vitro cell uptake studies were performed, although it is unclear from the paper which exact formulation mix was used for this purpose.Based on these studies, the authors argue for a macropinocytic uptake mechanism distinct from classical endosomal uptake thought to be relevant for other types LNP/SNALP formulations.While the data are consistent with this, I would not classify them as proof that this is indeed the productive uptake mechanism, and a side-by-side comparison with a ‘SNALP’ would have been helpful when arguing for unique uptake mechanisms.This also reminds me of a presentation by Tekmira's CSO Ian MacLachlan on a visit to Stanford where only slightly changed SNALP formulations exhibited vastly different biodistributions within the liver.It therefore appears that while the variability of uptake mechanisms is not a property of ‘lipidoids’ per se, they may be one (of several) factor that can account for the greatly varying knockdown potencies of these formulations.

This paper and similar conference reports on the rational design of lipids (= approach taken by Tekmira and Alnylam's collaborators at the University of British Columbia and AlCana) demonstrate that the technological development of RNAi Therapeutics is still on a steep trajectory which should help reinvigorate interest in the field by the financial markets, especially as the worst has been avoided and the longer-term comes into focus again.The next steps will be to further characterize the pharmacology of these formulations and the application of scalable formulation methods.Both of this and the further development of liposomal delivery for receptor-targeted and (gain-of-function) immune applications as highlighted in the JP Morgan presentation by Alnylam CEO John Maraganore, should be sped up by good relationships between Tekmira and Alnylam, at a time that I feel Alnylam is more and more distancing itself from and down-playing the importance of Tekmira when in fact Alnylam is increasingly adopting methods invented by Protiva/Tekmira. The JP Morgan Healthcare meeting where both companies are present should be a good opportunity to patch up relationships. One potentially mutually beneficial solution may be for Alnylam and Roche to take a majority stake in Tekmira with a simultaneous cash infusion, but let Tekmira operate independently to keep their minds sharp, similar to the Roche-Genentech example.

Note added in proof: January 2010 Nature Biotech biotech paper by Tekmira and Alnylam on significantly improved SNALP formulations through the rational design of lipids (link and press release).

mdRNA announced today updates on results in mice for their liposomally delivered RNAi Therapeutics candidates for solid cancers. They also said to have entered into an "early collaborative effort with a major international pharmaceutical company". While not negative news for sure, both types of news items would appear to make the 75% run-up in shares this morning to be an over-reaction, especially given the one-month window it has to find additional funding. I will therefore take a trading profit at $1.71, and possibly look to re-enter the stock, maybe after an opportunistic financing following today's announcement.

Disclaimer: Investments in RNAi Therapeutics are highly risky and not suited for most people.The purpose of the blog and model portfolio is to convey a sense of the dynamics in the field and is NOT an endorsement for making related investments. I also have financial interests in some of the companies included in the portfolio. I do not, however, have short positions in any of those.

Tuesday, January 12, 2010

I have decided to sell all of RXi Pharmaceuticals in the RNAi Therapeutics model portfolio (for $4.49).This is partly an opportunistic move that comes after a remarkable meteoric ~200% run-up from its all-time low of $1.51 in the absence of a change in fundamentals (a recent overview can be found here), and a new CEO that needs to be able to learn as fast as the stock price has risen.I will keep the proceeds as cash for now, as I continue to research one particular company as a potential candidate for re-investing the proceeds. Stay tuned.

Disclaimer: Investments in RNAi Therapeutics are highly risky and not suited for most people.The purpose of the blog and model portfolio is to convey a sense of the dynamics in the field and is NOT an endorsement for making related investments. I also have financial interests in some of the companies included in the portfolio. I do not, however, have short positions in any of those.

Thursday, January 7, 2010

Tekmira today reported very encouraging results from their first clinical study with SNALP siRNA delivery targeting apolipoprotein B for the treatment of hypercholesterolemia (PRO-040201, aka SNALP-ApoB). While the ~20% ApoB/LDL-c knockdown following single dose administration and evidence for flu-like toxicities at the highest tested dose level indicate that the present formulation is not suitable as a therapeutic, the company is rightly optimistic that based on these results, follow-up formulations that it intends to enter into the clinic later this year will be able to provide significant improvements in the absolute dose and therapeutic index. This is because the new knowledge can now be applied to the rapid progress that has been made in finding much more potent SNALP/LNP formulations (see recent PNAS paper and ILS2009 presentation) since the present formulation was locked down 2 years ago. In addition, much has been learned since on how to predict and mitigate SNALP siRNA-triggered immunostimulation in humans (extensive review). I therefore agree that it was probably the scientifically and financially best decision by the company to stop this trial at this stage and focus their resources on the next formulation.

When I first adopted SNALP/liposomal delivery as my pet systemic siRNA delivery approach 2-3 years ago, my main outstanding nightmare stemmed from an unexpected early-stage clinical disaster during a phase I trial by the same company (Protiva branch) almost a decade ago employing related stabilized cationic liposomes for the delivery of plasmids (SPLPs).In that trial, severe flu-like symptoms were observed at the very early and low dosages and the was trial terminated and the drug never heard of again. Instead of giving up, this has stimulated them to undertake almost heroic and industry-leading work aimed at mitigating immunostimulatory effects of liposomal nucleic acid delivery. It is thus quite remarkable that after just seven years after stumbling on siRNAs as more promising payloads for the technology, Tekmira has now demonstrated unambiguously functional liposomal siRNA delivery following systemic (intravenous) administration, with first, transient flu-like symptoms observed at what should be much higher dosages compared to the SPLP trial.

It is worth bearing in mind that the decision to stop the trial was not because the one case of flu-like adverse event was deemed a serious one, but because they felt that at this point they had already learnt what they wanted to learn and given the superior performance of the next-generation formulations it would therefore not have been ethical to further expose patients to a drug that will not be developed for commercialization (all my interpretation). It also might have risked tainting the asset with little to gain. To put the toxicity into context: in the most recent published clinical results on ISIS’ mipomersen targeting the same gene, 70% of patients receiving drug exhibited flu-like symptoms at similar 20% ApoB/LDLc knockdowns.

Equally encouraging is the fact that the knockdown, which based on the natural intra-person lipid variability and the pharmacokinetics of the reported knockdown (fast onset as expected for an RNAi drug) was almost certainly due to drug, occurred at dosages where the company expected to start seeing efficacy based on pre-clinical animal studies.One cannot underestimate the importance of being able to predict efficacious dose (and toxicity) based on these models, particularly at the early stages of evaluating such a novel technology where very little human pharmacological experience has been obtained.

The trial design involved cohorts of 4 patients for each dose level: one treated with placebo and three with study drug. While 8 cohorts had originally been planned, the trial was stopped in approximately the 6th or 7th cohort. According to the company, at this point the dose had been escalated to somewhere in the 0.6mg/kg ballpark and is thus consistent with IC50s for SNALP-siRNAs in non-human primates of ~1mg/kg at that time.Considering that according to a presentation at the International Liposome Society a month ago by Pieter Cullis, scientific founder of Tekmira, SNALP-like formulations have now reached IC50 potencies in non-human primates of ~0.03mg/kg, i.e. around 1.5 magnitudes better, there is every reason to believe that significant improvements in absolute dose and therapeutic index can be achieved with the follow-on SNALP-ApoB candidate. Strengthening this claim, similarly potent formulations have just recently surfaced from a study supposedly (Alnylam IR: I still cannot find the paper) published in PNAS by Alnylam and collaborators at the MIT on lipidoid-containing SNALP-like particles (allow a delay of at least a year from experimental finding to publication).

While all this sounds good, a critical question to ask is what gives them also the confidence that the new formulations (= more potent liposomes + less immunologically active siRNAs through modification) will not perform worse immunologically than the first one, thereby eliminating some of the benefit from the improvements in SNALP potency.The ability to answer this question would hinge on the ability to sensitively detect immunostimulation and translate such findings pre-clinical models into humans.The JCI paper last year by Tekmira scientists on the application of SNALP for distant tumors in mice showed that Tekmira indeed understands how to detect such responses even in the absence of cytokines in the serum (tissue-based PCR assay for IFIT1 mRNA). And from all the presentations I have seen, another important piece of the puzzle in being able to translate from animals into humans is the good correlation between immune responses seen in in vitro human PBMC immuno-assays and responses in animals. In combination, these elements allow for efficiently modifying siRNAs until predicted immune-related tox in humans have been minimized. Through such knowledge, Tekmira was able to provide a good explanation for why some non-human primates exhibited liver toxicity in the 2006 Nature study (the first demonstration of systemic RNAi in non-human primates) even in the absence of outward immune activation and remedy it through siRNA modification.It is interesting, however, that in the present clinical trial the presumed immune stimulation appeared to have (thankfully) been uncoupled from liver enzyme elevations as an absence of liver toxicities was noted. Although the reasons behind these are unclear, this uncoupling lends further credence to the notion that also efficacy and liver toxicity can be uncoupled: the mechanism that allows for functional entry of the liposome itself does not cause hepato-cytotoxicity.

According to a conversation with the company that I had following yesterday’s release of top-line results, it also appears that they have developed what appears to be a separate assay that they have not disclosed yet, and that should be even better in predicting immune responses in humans.Although, in the absence of seeing the data, I will have to take the company by its word here, as a proven leader in liposomal siRNA delivery, I’d like to give them the benefit of the doubt.

Looking ahead

The company indicated that the new formulation will go into the clinic later this year, although discussions with the FDA have yet to determine the exact regulatory requirements for this (e.g. an abbreviated IND package would make sense IMO).Like the first trial, the second one is likely to be a single-dose one, and a multi-dose trial in humans would similarly require additional pre-clinical data.All this makes it clear that the main value of this program to the company is that ApoB is an exceptionally good target to most rapidly develop insights into the entire SNALP-siRNA delivery platform.The market reaction tomorrow, however, will show whether this is shared by investors who may be disappointed by the delay on ApoB and may have also hoped that SNALP-ApoB could find a development partner soon.However, I would think that most invested in Tekmira as a leader in systemic RNAi delivery and are equally encouraged that the company is now able to build real data which have for the first time demonstrated unambiguous systemic RNAi gene silencing in Man. In addition to investor perceptions, the financial repercussions of these results also depend on what value such pioneering work will fetch from potential partners that are interested in the broad development of the RNAi Therapeutics platform.

Whether Tekmira’s enthusiasm is shared by current partners will be seen by their clinical actions.As such, Alnylam until recently reiterated that it was still on track to file an IND for the liver-directed SNALP-TTR.Since Alnylam apparently was aware of the status of SNALP-ApoB in November already (see RNAi Clinical Experience chart in this slide presentation), Alnylam also seems to be comfortable that the more potent SNALP formulations will have clinical applicability given Tekmira's results.I look forward to learning about the TTR trial design, including whether multi-dose will be attempted, and there should be results by the end of this year. In addition, the fact that we have just learned that Roche entered IND-enabling studies, most likely with a SNALP product, further validates Tekmira’s decision. The fact, however, that the IND submission of SNALP-PLK1 has been moved into the second half of this year represents a slight delay, and it remains unclear whether this might be related to today’s news.

In any case, today makes me feel like we have witnessed possibly the beginning of the most important line of RNAi Therapeutics clinical research thus far. Many more data-points on clinical SNALP-siRNA delivery should accumulate over the next two years.

Disclosure: I have financial interests in the company, largely by holding TKM shares.

Note added in proof: Scientific papers by Tekmira and Alnylam on the development of significantly improved SNALP formulations:

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